Alibaba Hired Lobbying Firm Duberstein Group to Aid in Possible Yahoo Deal

By Ian King - Dec 30, 2011 4:14 AM GMT+0700

Alibaba Group Holding Ltd (ALIBABZ). hired Washington lobbying firm Duberstein Group Inc. earlier this year as it explored potential transactions involving Yahoo! Inc.

Duberstein, founded by Kenneth Duberstein, a former chief of staff under President Ronald Reagan, disclosed its affiliation with Alibaba’s legal representatives in a filing this month.

Alibaba, China’s largest e-commerce business, has sought to buy back a stake that Yahoo owns in the company. It stepped up efforts to make a deal after the September ouster of Yahoo Chief Executive Officer Carol Bartz, who opposed a sale. Yahoo also is considering proposals by private-equity firms seeking to buy minority stakes, people with knowledge of the talks have said.

Yahoo’s 40 percent stake in Alibaba has given it a piece of the fast-growing Chinese market, helping maintain the U.S. Internet company’s value even as it loses ground to Google Inc. and Facebook Inc. Yahoo acquired the stake in Hangzhou, China- based Alibaba for about $1 billion in 2005.

Yahoo has considered offers for a minority stake from bidders such as TPG Capital and a group led by Silver Lake, people familiar with the matter have said. Silver Lake’s bid valued Yahoo at about $16.60 a share, these people said. TPG Capital’s offer was higher, they said.

Huawei’s Example

Alibaba’s involvement in a deal may draw scrutiny from the U.S. government, especially because Yahoo handles online communications for millions of Americans.

In 2008, China’s Huawei Technologies Co. dropped a bid for Marlborough, Massachusetts-based computer-equipment maker 3Com Corp. after the U.S. government began investigating whether a deal would give China access to technology used by the Defense Department.

John Spelich, an Alibaba spokesman, declined to comment, as did Dana Lengkeek, a spokeswoman for Sunnyvale, California-based Yahoo. The Duberstein Group said it doesn’t comment on its clients.

Yahoo shares (YHOO) rose 2.2 percent to $16.13 at the close in New York. The stock has declined 3 percent this year.

Alibaba hiring Duberstein was previously reported by Reuters.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net.

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net